The Profits of a Proprietorship Are

question 130

Multiple Choice

The profits of a proprietorship are

• A) taxed at the same rate as the owner's other personal income.
• B) subject to a corporate tax.
• C) taxed as capital gains indexed for inflation.
• D) exempt from taxation.

---

Definitions:

Cost System

A method or process used by a company to capture, measure, and allocate costs to products, services, or other cost objects.

Conversion Cost

The combined cost of direct labor and manufacturing overheads, which are necessary to transform raw materials into finished goods.

Equivalent Unit

represents a measure used in process costing, converting work-in-process into the number of finished units, facilitating cost allocation.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold based on the average cost of all items in inventory, taking into account the quantity of each item.